The strategic importance of chief financial officers puts them on the front line to face complex corporate challenges, but also to reap golden opportunities for growth from today’s globally integrated economy.
“The impact of globalization is that we have moved from geographic coverage spanning maybe three or four time zones, to something that is now 24 hours around. We’re dealing with many different countries, languages and cultures,” says David Anderson, CPA, CA, CMA, executive vice-president and chief financial officer of CGI Group in Montreal and a director of FEI Canada
Sandra Pupatello, director of business development and global markets for PwC in Toronto, is in full agreement. “As a key executive, a CFO must really have their eye on what’s happening around the world,” she says, noting that the recently concluded European Union free trade agreement and a burgeoning middle class in emerging markets are opening up new trade opportunities.
“It also opens the door to say: ‘How do we take advantage of it?’ ” adds Ms. Pupatello.
CFOs with all types of firms are affected by globalization. All publicly listed entities in Canada must use international financial reporting standards (IFRS), which are currently prevalent in more than 100 countries around the world, providing investors and analysts with a comparable set of benchmarks.
However, the reality of globalization may also impact private company CFOs.
“In Canada we’ve made the decision that Canadian generally accepted accounting principles continue to be available for companies that aren’t publicly accountable,” says Axel Thesberg, FCPA, FCA, a senior adviser to CPA Canada in Toronto.
“It may be less costly to continue to use Canadian GAAP as opposed to implementing IFRS. But if they want their financial results to be compared to others around the world in accessing capital or financing, it may well be a better decision for them just to adopt IFRS, even though it’s not required,” Mr. Thesberg explains.
Paul Parisi, vice-president and general manager of global corporate payments at American Express, says that globalization faces CFOs with companies operating in multiple currencies.
“We’ve invested in a currency solution for U.S. dollars with the Global Dollar Card,” says Mr. Parisi. “Corporations don’t have to pay foreign exchange or bank transfer fees. They settle, expense and manage in U.S. dollars, saving them time and driving efficiencies.”